Equity benchmark BSE Sensex rallied over 500 points in opening session on Thursday as global markets rebounded after the US offered to embrace peace with the Iranian leadership in a bid to de-escalate tensions in the Middle East.

After hitting a peak of 41,318.18, the 30-share BSE index was trading 449.56 points or 1.10 per cent higher at 41,267.30. Similarly, the broader NSE Nifty surged 134.05 points or 1.11 per cent to 12,159.40.

SBI was the top gainer in the Sensex pack, rising up to 2.19 per cent, followed by IndusInd Bank, Bharti Airtel, Tata Steel, ICICI Bank, L&T, Axis Bank, Reliance Industries and HDFC twins.

On the other hand, TCS was the sole stock trading in the red.

In the previous session, Sensex ended 51.73 points, or 0.13 per cent, down at 40,817.74, while Nifty shed 27.60 points, or 0.23 per cent, to finish at 12,025.35.

Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 515.85 crore, while domestic institutional investors purchased shares worth Rs 748.40 crore on Wednesday, data available with stock exchanges showed.

According to traders, domestic investors turned positive as global equities rebounded after US President Donald Trump offered to embrace peace with Iran.

Claiming that no Americans were harmed in the attack by Iran on US bases in Iraq, Trump called on Iran to 'work together' to eliminate the Islamic State.

In a direct message to the Iranian leaders and the people, Trump said the United States was 'ready to embrace peace with all who seek it'.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul rallied up to 2 per cent.

Exchanges on Wall Street too ended on a positive note on Wednesday.

Brent crude futures rose over 0.69 per cent to USD 65.89 per barrel.

Meanwhile, the rupee appreciated 22 paise to 71.47 against the US dollar in morning session.